Bill would tell donors to report race, sexual data

A bill working its way through the California Legislature faces serious resistance from the state's large foundations.

AB 624 would require foundations with assets over $250 million to collect and disclose the race, gender and sexual orientation of all their employees and board members, as well as the employees and board members of the nonprofits to whom they award grants and the contractors with whom they do business.

The foundations must then break out what percentage of grant dollars go to organizations that are more than 50 percent minority-run.

The bill, which was promoted by Berkeley's Greenlining Institute and sponsored by Assemblyman Joe Coto of San Jose, wants the nonprofit world to be more diverse and to empower minority communities.

It won easy passage in the Assembly last week and is headed for what is sure to be a more contentious hearing in the state Senate.

Over a dozen Bay Area foundations would be affected, including all four of the region's community foundations, the Packard Foundation, the Hewlett Foundation, the James Irvine Foundation, the Gordon and Betty Moore Foundation and even large corporate foundations.

Opponents stress that while they support the diversity goals of the bill and its attempts to increase funding for the state's disadvantaged minorities, they do not believe AB 624 is the answer.

"Opposition to the bill should not be construed as opposition to diversity in philanthropy and some of the goals I think the bill stands for," said Jim Canales, president and CEO of the James Irvine Foundation in San Francisco.

Northern California Grantmakers, Southern California Grantmakers and San Diego Grantmakers, which represent all the large foundations in the state, have united in their opposition to the bill. Separately, the Irvine Foundation sent a letter to each member of the Assembly asserting its belief that the bill could hurt the very goals it aims to support.

Not everyone has chosen a side; San Francisco Foundation has a neutral position.

Whether a nonprofit's staff and board are half minority has no bearing, critics say, on the impact that nonprofit can have in minority communities. Too, the bill could invade privacy of foundation workers and grantees who may not feel comfortable having their sexual orientation disclosed in an annual report. Many foundation leaders also worry that collecting that data would be an added administrative burden.

John Gamboa, executive director of Greenlining Institute, dismissed the notion that the bill would burden nonprofits and said that such transparency is critical to empower minority communities. By forcing foundations to look at the racial and ethnic makeup of the nonprofits it supports, Gamboa believes, this bill will help minorities receive grant money that could help develop future political activists and nonprofit leaders from disenfranchised communities of color.

"I don't think it's the right solution, but it's the only one we're left with," Gamboa said.

Nationally, Greenlining Institute estimates that just 3 percent of national giving is to minority-led nonprofits. Locally, however, that number is probably much higher. Three of the four local community foundations are led by non-whites, as is the Irvine Foundation.

"One of the ironies to me is that I think California really has been a leader of diversity within philanthropy," Canales said. "To me, that demonstrates the tremendous progress we have made as a philanthropic community in California ... and now we are facing more stringent legislation than almost anywhere in the country."

Canales added that Irvine has long focused on serving minority communities and that increasing opportunities for all Californians is part of Irvine's mission. He agrees that more needs to be done to understand diversity in philanthropy, and Irvine and other foundations are working with the Resource Center to understand the landscape.

Canales cautioned that the legislation is being pushed through before anyone in the philanthropic world even knows how many nonprofit organizations exist that meet Gamboa's 50-percent minority goal. Gamboa said a dearth of such minority-led organizations could in itself be a result of past failure to fund them.

"Foundations were established to provide the public good. They enjoy a $30 billion tax exemption nationally," Gamboa said. "I think they are doing a public good, but not the entire public."